Termination negotiations

As well as being legally proficient, HR professionals need to be able
confidently to conduct negotiations over terminations in a way which minimises
the exposure of the employer to legal liability. As well as a good grounding of
the legal issues involved, they need to have a working knowledge of when to act
"without prejudice" The ability to bargain hard also comes in handy.

Legal issues

Even if it includes a full waiver clause, a simple termination agreement
will not waive the employee’s statutory rights. The advantage of such an
agreement, however, is that it can be done informally, in an atmosphere of
trust. The employer will take the risk, of course, that a statutory claim will
be made, although it can usually set off any ex-gratia payments already made to
the employee against any such claim.

It is sometimes a useful device to delay part of the termination payment to
a time after the time limit for bringing such statutory claims. It is also
common to see agreements which expressly state that all monies paid to the
employee are repayable in the event of a tribunal or court claim being made.

To waive a statutory employment right, there needs to be either a valid
statutory Compromise Agreement or a COT3 form drawn up under the auspices of Acas.
It should be noted that if a COT3 form is desired, the Acas officer should be
involved throughout the negotiations. Acas officers usually refuse to
"rubber stamp" an agreement which has already been made without
active conciliation by the Acas officer.

Practical issues

Is it best to suggest to the employee "up front" that there could
be an amicable termination settlement, or to allow this to develop after
"on the record" proceedings? The answer often depends on the legal position
of the employer. If there are strong legal grounds for dismissing the employee
in any event, negotiating before demonstrating this may be unwise. This would
usually mean at least initiating the disciplinary proceedings or even carrying
out the dismissal.

If the employer’s position is relatively weak, however, it is sometimes
advisable to suggest a "free and frank" discussion with the employee
off the record before making a move. All avenues can be explored in a way which
might lead to a potentially acceptable settlement. Employers will need to be
careful how this is handled in order to avoid a claim for constructive
dismissal. However, since a dismissal is usually being considered, this risk
may not be unpalatable.

Employers should also bear in mind their tactical advantage in negotiations,
even if they have a weak legal position. The employee will be looking for a
reference and continuing income.

In such situations, the employer could put two contrasting outcomes to the
employee – an amicable settlement with the continued provision of benefits for
the notice period, a reasonable termination figure, and the ability to agree
announcements and references, or on the other hand, an abrupt termination with
the legal minimum only being paid.